What’s behind a slick supply chain?

Unipart Logistics Systems looks after logistics for more than car majors. Brian Tinham talks to its head of IT about the systems and processes behind its operations

ne way to get your supply chain processes improvement, visual management, workplace audit slick, flexible and efficient while simulta- and standard operating procedures, to name but a few. o neously cutting costs is to outsource some It was all done so that people can continuously or all of the load to a third party. Jaguar, improve. We created our versions of these techniques, , London Taxis, Homebase, and modifying them to work in our environment, and cre- do: they’re using Unipart Logistics – at ated the ‘Unipart Way’ of working. Our clients in the £1.1bn, one of largest privately-owned companies in supply chain are looking for value-add in the supply the UK, and focused entirely on supply chain services. chain: it’s not just about warehouses: it’s about enhanc- Why Unipart? Probably because the automotive sec- ing customer experience. tor is more mature than most – being subject earlier to “As for technology, we needed a new end-to-end sup- the pressures of globalisation – and this organisation ply chain system [so] we selected SAP to be at the core. has been in the thick of it. And since it’s specialised in That initial implementation was completed in mid after-market automotive components management 2001 and the services we provided to at that globally since its formation (as the result of an MBO time moved onto ULS [Unipart Logistics System] … To be from in 1987) there’s plenty of experi- successful you need to get the foundations right, and ence here for others to capitalise upon. this includes the right business process model and As Unipart Logistics IT director Myron Hrycyk says: management practices, skilled people using the full “Back in 2000, we took a strategic look at how to struc- spectrum of operational techniques and a strategically ture our supply chain. We could see then that our cus- designed technical platform. tomers were looking for leaner supply processes in “Those foundations are now beginning to show their order to drive down their costs. So we decided to do a strategic strength for us. For example, we have to be business and supply chain transformation: we conclud- flexible and good at finding new sources of parts to sat- ed that to work properly any solution would require isfy our clients’ demands. So we need the ability to inte- completely redesigned processes, retrained people and grate quickly with new suppliers so we can send them leading edge systems and technologies.” schedules and monitor performance. Vendor stability What did it take? “On the business processes side we and vendor supply are challenges, but our framework and technology allow us to change suppliers when we need to, also minimising the impact through the sys- “Our web-based solutions have tem. SAP is really working for us.” created real business flexibility” He cites current problems in the automotive sector with the over-supply of cars. “Volumes are down, so our Myron Hrycyk, Unipart Logistics clients look to us to reduce costs and pass savings back to them,” explains Hrycyk. “So we have programmes of created a supply chain based on four processes. First innovation for this: for example, post 9/11, the US was inbound materials management, with inventory tightened up its import regimes and there was a back- management, vendor management, scheduling and so log of product at the ports which was impacting dealers. on. Second was an outbound management system cov- A simple solution might have been to either pump ering storage, pick, pack and despatch. Third was the more inventory into the supply chain, or use air freight, customer processes – so order entry, order processing, but both would have increased costs. So we were smart: checking parts availability, estimated time of for and went for CTPAT accreditation so that when our the dealers. And fourth, underpinning the whole product goes into US docks it gets high priority through process model were end-to-end finance processes. the import processes. “On the people side, we learnt a lot from “Also to get more product to dealers more quickly, management and practices. We looked to them in terms we have looked at getting more regional DCs [distribu- of lean thinking and JIT [just in time] provision of prod- tion centres]. Rather than pushing product to a central uct. We also drew heavily on Six Sigma, continuous distribution centre and then pulling it out, we’ve set up

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direct shipping to RDCs – allowing us to be more flexi- ing the parts and ensuring that dealers have stock of a “I don’t see us running ble.” And the ULS design enables these business range of service parts ahead of all new model launches,” our services on processes to be rapidly developed and deployed. says Hrycyk. “We’ve got to procure the parts, get them off-the-web software Technology is key to all of this, he insists, and hence through the supply chain and get them out there. All components for some the major SAP implementation a few years ago which the processes have to be working – and that includes time yet: that’s a step has just been upgraded to the latest version of SAP recall with reverse logistics, warranty parts and the rules too far at the moment.” Business Suite – the latest stage in Hrycyk’s technology for automating parts for repair or exchange. Is it scrap, Myron Hrycyk, IT strategy for ULS. His advice on IT and SAP in particular: or to go back to manufacturer, or back into stock? director, Unipart “Getting SAP right is all about getting the business “SAP and our inventory management and dealer sys- Logistics process design and configuration correct from the start. tems cover all this, and our business intelligence system provides ‘one version of the truth’ throughout the sup- Right first time ply chain for accurate real-time reporting.” And that’s “One characteristic of any SAP implementation is that for hundreds of suppliers and thousands of dealers, it’s interwoven tightly with your business processes so ensuring that the flow of data and parts is automated it’s difficult to unpick. It’s essential to get the design and seamless. “Also our web-based solutions at the front right first time or sooner or later you’ll have the expen- and back of the supply chain have created real flexibili- sive task of re-doing it. Secondly, to deliver business ty, access to data and rapid implementation,” he adds. improvements you need access to technology, so if “The next thing for us this year will be to look at you’re on an old R/3 version you need to get some of what an SOA [service orientated architecture] can offer. the new SAP functionality, like portal-based features I’m wondering, can the IT platform enable the business and the Netweaver infrastructure for integration. to rapidly remodel its processes. For example, with an “For example, one of our core competencies is SOA in place will we be able to rapidly deploy a lean, inventory management. We have our own technology simpler supply chain for a client that doesn’t demand and our own algorithms for that, and it all integrates the complexities of the automotive supply chain? with our SAP solution. One of our drivers is to enhance Completion of our SAP upgrade – and that includes its the customer experience of our clients, and most of that ESA [enterprise service architecture] – gives us the com- is at the dealer touch point. We therefore developed our ponents to deliver our vision. Also, if customers or sup- own front end technology on IBM Websphere – giving pliers are on non-SAP systems, the new architecture us rich functionality for the dealers and our customers should enable easier integration.” in terms of online catalogues, services for placing and But Hrycyk is realistic “These are mission critical checking orders etc, that are all browser-based.” processes and services; we have SLA’s with global cus- And for Unipart, its worth noting that its systems tomers to meet. So I need to be able to guarantee them. and outsourced services don’t stop at running its I don’t see us running our services on off-the-web soft- clients’ after-market supply chains. They include, for ware components for some time yet: that’s a step too far example, aspects of new car parts introduction. “With at the moment.” I Jaguar, for instance, we are responsible for taking new model technical data into our systems, and then sourc- ᠣ Enter 330 at www.mcsolutions.co.uk/enquiry

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